This paper puts forth a unified theory of growth that captures a number of relevant features of countries' transitions from stagnant, predominantly rural economies to vibrant, industrialized economies that have been overlooked by the literature. In our theory, increasing variety of consumer...

Why did the Industrial Revolution start sometime in the 18th century in England and not earlier and in some other country? This paper argues that the key to the start of the Industrial Revolution was the expansion and integration of markets that preceded it. Due to less regulation, increasing...

This article proposes a novel mechanism whereby larger markets increase competition and facilitate process innovation. Larger markets, in the sense of more people or more open trade, support a larger variety of goods, resulting in a more crowded product space. This raises the price elasticity of...

This paper puts forth a unified theory of growth that captures a number of relevant features of countries transitions from stagnant, predominantly rural economies to vibrant, industrialized economies that have been overlooked by the literature. In our theory, increasing variety of consumer goods...

Technology change is modeled as the result of decisions of individuals and groups of individuals to adopt more advanced technologies. The structure is calibrated to the U.S. and postwar Japan growth experiences. Using this calibrated structure we explore how large the disparity in the effective...

We construct a model of economic growth in which firms adopt more advanced technologies. In order to advance its technology, a firm must make an investment. The size of this investment depends on the size of the technology adoption barriers in the firm's country. Assuming a Markov chain for...

This article argues that a natural implication of an innovation-based theory of growth is that slow development facilitates the formation of special interest groups. We demonstrate this in a growth model where innovations take the form of new goods and new production processes, and where factor...

Although many of the worst performing countries over the post-World War II period were autocracies, many of the best were likewise autocratic. At the same time, no long-lived autocracy currently is rich whereas every long-lived democracy is. This paper proposes a theory to account for these...